Franchise Attorney in New York, New York
What is the difference between a franchisee’s market and territory?
What is the difference between a franchisee’s market and territory?
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the territory is an exclusive area
that the franchisor provides to the
franchisee and most franchise agreements
have them but not all but it may be even
for a single franchisee it may be three
miles from uh radius from your location
a market is what the franchisor
uh what the franchisee i’m sorry is
actually going to be selling franchises
uh and who is going to be influenced by
that sale so your your territory may
will provide that the franchisor is not
going to open any other units either
company owned or franchised within your
territory but your market may be larger
than your territory you may have a three
mile territory your market may be 10
miles because people may be driving
seven or eight miles away to get to your
gym or whatever whatever it is that
you’re operating so the territory and
the market are
are two different things but incredibly
related
New York, NY franchise law attorney Richard L. Rosen explains the difference between a franchisee’s market and territory. He explains that the territory is an exclusive area granted by the franchisor to the franchisee. While most franchise agreements include a defined territory, not all do. For a single franchise, this territory might be, for example, a three-mile radius around the location. A market, on the other hand, refers to the area where the franchisee will actually be selling and influencing customers. The territory ensures that the franchisor will not open additional units—whether company-owned or franchised—within that exclusive area. However, the market may extend beyond the territory; for instance, a franchisee might have a three-mile territory but draw customers from a ten-mile area. While territory and market are distinct concepts, they are closely related.
